A successful infection involves: virus entry into the cell; uncoating, expression, and replication of the genome; assembly and release of infectious virus particles; and defense against specific and non- specific host immune mechanisms. Combined genetic, biochemical, electron microscopic, and immunologic approaches are being used to investigate these complex processes. During the past year, studies have continued on the assembly of vaccinia virus. A viral protein, p65, was found to accumulate in novel inclusion bodies when the assembly of vaccinia virus was prevented by use of a specific inhibitor. Following reversal of drug treatment, the p65 protein became associated with the immature viral membranes. The p65 protein may function as a membrane scaffold to assemble the viral particle. Vaccinia virus has at least three genes that determine the host range of the virus in tissue culture cells. The absence of the K1L gene was found to result in a block in both vaccinia virus DNA replication and transcription of the intermediate class genes in rabbit kidney cells. A rabbit cell line was constructed that stably expressed the vaccinia virus K1L gene and was permissive for viral K1L deletion mutants. This is the first description of the complementation of a poxvirus mutant by cells that stably express a viral gene.